July 24, 2024
Latest Cryptocurrency News

Major Sell-Off of New zkSync Token, ZK Causes Price Plunge

On Monday, June 17, zkSync launched its new token, ZK, but nearly half of the top wallets that received the airdrop have already sold their entire allocation. This mass sell-off contributed to a 34.5% fall in the price of ZK since its launch.

According to blockchain analytics firm Nansen, around 41% of tracked addresses sold their entire airdrop, while 29.2% sold at least some of their tokens. Combined, these cohorts sold over 486 million ZK. In contrast, just over 30% of the top receiving wallets have held onto their ZK tokens.

Widespread Distribution and Initial Network Issues

The data covered the “top 10,000 addresses” that obtained the ZK airdrop, or roughly 1.4% of the 695,232 wallets that zkSync claimed were qualified for the 3.7 billion ZK tokens that were given away last week.

Nansen monitored the “top 10,000 addresses” that received the ZK airdrop, highlighting those who sold (green) and partially sold (yellow). Source: Nansen

The nonprofit zkSync Association, created last week by zkSync developers Matter Labs, reported on X earlier on June 17 that 45% of the tokens were claimed in under two hours. This heavy load caused some initial network issues.

As of publication, over 491,000 wallets have claimed nearly 75% of the airdropped ZK, according to data compiled by Matter Labs data scientist Landon Gingerich.

Price Drop and Market Impact

zkSync Token, ZK has seen a significant price drop, plummeting 34.5% in the last day. The token hit a high of $0.32 shortly after launch but has since dropped to around $0.20, according to CoinGecko.

The price of ZK token has decreased by 33.5% in the last 24 hours. Source: CoinGecko

Only 17.5% of the 21 billion tokens in total—worth over $4.4 billion when fully diluted—are presently available for purchase. This puts its market capitalization at around $772 million, down from its over $1.1 billion peak shortly after launch.

Airdrop Criticism and Response

The major sell-off by top wallets comes after zkSync faced criticism regarding its airdrop criteria. Critics argued that the anti-Sybil measures, which aim to prevent entities from using multiple wallets to game airdrops, were too lax. In response, zkSync updated a document on June 15, explaining that aggressive Sybil filtering could have falsely flagged real users. They opted for a “unique airdrop design” to reward the highest number of organic users.

Image from Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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